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Vavilala Vasudeva Sastri and anr. Vs. Sreemathi Yarlagadda Annapurnamma Garu and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtChennai
Decided On
Reported inAIR1935Mad809; (1935)69MLJ137
AppellantVavilala Vasudeva Sastri and anr.
RespondentSreemathi Yarlagadda Annapurnamma Garu and anr.
Cases ReferredAnantandrayana Aiyar v. Sankaranarayana Aiyar I.L.R.
Excerpt:
.....therefore not necessary that a formal request should be made to the court for leave either to start the proceedings or to continue them in the name of the official receiver......a declaration that the scheduled property belonged to the insolvent and for a direction that the official receiver might sell the property for the benefit of the general body of creditors. the affidavit in support of the application, whilst stating other facts, stated that the petitioners (appellants here) filed a petition before the second respondent, the official receiver of kistna, asking him to take up the matter and move the court but that the official receiver rejected the petition although all the materials were placed before him upon which to take the necessary steps. the official receiver, the second respondent here, was also made a party to the application.2. the first point to be decided is whether the preliminary objection taken in the lower court was well-founded. that.....
Judgment:

Horace Owen Compton Beasley, Kt., C.J.

1. The application in the lower Court was an application under Section 4 of the Provincial Insolvency Act praying for a declaration that the scheduled property belonged to the insolvent and for a direction that the Official Receiver might sell the property for the benefit of the general body of creditors. The affidavit in support of the application, whilst stating other facts, stated that the petitioners (appellants here) filed a petition before the second respondent, the Official Receiver of Kistna, asking him to take up the matter and move the Court but that the Official Receiver rejected the petition although all the materials were placed before him upon which to take the necessary steps. The Official Receiver, the second respondent here, was also made a party to the application.

2. The first point to be decided is whether the preliminary objection taken in the lower Court was well-founded. That was, that an application such as this could not be made unless the leave of the Court had been obtained under Section 28(2) of the Provincial Insolvency Act. The learned District Judge held that these proceedings could not be taken without such leave of the Court having first been obtained. Therefore, the question is whether an application such as we have here necessitates the leave of the Court being obtained under Section 28(2) of the Provincial Insolvency Act, that is to say, whether that section is sufficiently wide as to cover all legal proceedings taken by a creditor relating to the insolvency or whether it is to have a restricted meaning given to it and that meaning, to be, only proceedings by way of suit in which the creditor himself seeks to recover his own debt. I am clearly of the opinion that these proceedings are proceedings which come within the provisions of Section 28(2) and that therefore leave to institute the proceedings must first of all have been obtained. At any rate leave must first of all be asked for. Clearly any application relating to Sections 53 and 54 of the Act requires that the leave of the Court should be obtained by the creditor. Those proceedings have for their object the setting aside of transfers which, if successful, would result in property being put at the disposal of the Official Receiver as being assets distributable amongst the creditors of the insolvent. The application here was one which, if it succeeded, would bring about the same result. If the transaction impeached should be declared to be benami, the result of the declaration would be that property comprised in the transaction would vest in the Official Receiver. I can see no reason whatever for thinking that such an application as we have here is not one which requires the previous sanction of the Court before it can be proceeded with. But it is argued that, even so, there has been a sufficient compliance with the terms of Section 28(2) and that there really has been an application before the Court for leave to proceed with the application. That contention is based upon two grounds, namely, that first of all the Court's attention was brought to the fact that the Official Receiver had at the request of the appellants declined himself to take proceedings and, secondly, that he has been joined as a party to the application. Such a position as this was dealt with by Spencer, J., in Anantandrayana Aiyar v. Sankaranarayana Aiyar I.L.R. (1923) Mad. 673 who regards what was done in that case as a sufficient compliance with the provisions of the Act. I am not unmindful of the fact that it is imperative that any consent which is necessary should be obtained before the institution of the proceedings but I think that there is a good deal to be said for the argument put before us that by implication the leave of the Court was really being asked for and it was therefore not necessary that a formal request should be made to the Court for leave either to start the proceedings or to continue them in the name of the Official Receiver. Under these circumstances the application was maintainable. The order of the learned District Judge must, therefore, be set aside and the application remanded to the District Court for disposal according to law. The appeal is allowed with costs.

Cornish, J.

3. I agree.


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